News item | 20-09-2022 | 15:15
In 2023, the cabinet will make €16 million available to improve purchasing power for residents of Bonaire, St. Eustatius and Saba. An additional €12 million will then be made available in 2024 and €4 million annually from 2025. The money is part of the broad measures being taken to improve purchasing power in the Netherlands.
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This increase in purchasing power comes on top of the extra financial resources from the Coalition Agreement of €30 million on a structural basis (€23 million in 2022) to improve the living standard of the inhabitants of the Caribbean Netherlands. And is in addition to the €5 million made available by the government in March for lowering excise duties in 2022 and introducing an energy surcharge for low-income households.
The extra amount released by the cabinet will be used to make the energy surcharge also available in 2023. This concerns an amount of $1300 for households up to 130% of the statutory minimum wage. The reduction in excise duties on petrol will also be extended in 2023: USD 16 cents per liter for the first half of 2023 and USD 8 cents per liter for the second half of 2023.
In addition, older people will receive a higher basic pension in 2023. The increase in the AOV corresponds to the amount that was initially intended for 2025. This means that an AOV beneficiary with full AOV accrual, depending on the place of residence in the Caribbean Netherlands, will receive approximately $150 extra per month.
Parents will also receive more child benefit next year and childcare will be cheaper. This means for a single mother with 2 children aged 1 and 3, for example, that she will receive $40 extra child benefit per month and pay $50 less per month in childcare (with full childcare).
The tax-free sum is also increased. That is the part of the income on which no tax has to be paid. The increase of the tax-free sum in the Caribbean Netherlands by USD 500 leads to a tax reduction of 30.4% x USD 500 = approximately USD 150 on an annual basis for residents of the Caribbean Netherlands who pay wage or income tax.
The purchasing power measures are extra on top of the inflation correction that is generally applied from 1 January to the statutory minimum wage, the AOV, the AWW, the social security and the child benefit (as well as the tax-free sum). The level of the inflation correction is determined on the basis of the consumer price index of Statistics Netherlands for the third quarter of 2022. This percentage will be published around 20 October. The inflation rate for the second quarter of 2022 was around 8 to 9%, but how this will develop towards the end of the third quarter of this year is difficult to predict in advance.
Additional measures to dampen rising energy costs in the Caribbean Netherlands will be announced shortly.
State Secretary Alexandra van Huffelen of Kingdom Relations is pleased with the extra money for residents of Bonaire, St. Eustatius and Saba: “It is important that we help all residents of the Netherlands with extra purchasing power measures. I am pleased that there is also a good package for the Caribbean Netherlands. But I also know: we are not there yet. We must continue to work to tackle poverty.”
Minister Schouten for Poverty Policy sees that the livelihoods of a growing group of people are under increasing pressure due to the current sharp rise in energy and food prices: “That is why we are taking a large number of measures to improve purchasing power next year, such as a new energy surcharge for the low incomes, a higher basic pension and for parents a higher child benefit and cheaper childcare. It is necessary that the incomes and costs are more in balance with each other. The cabinet wants to take steps on this faster.”